There is no doubt about it a leasehold property in Deal is a wasting asset as a result of the shortening lease. Where the residual term has, in excess of 100 years to run then this decrease may be fractional that being said there will become a stage when a lease has less than eighty years left as part of the premium you will incur is what is termed as a marriage value. This could be significant. It is the main logic behind why you should extend the lease without delay. Most flat owners in Deal will qualify for this right; nevertheless a conveyancing solicitor can confirm whether you are eligible for a lease extension. In certain situations you may not qualify, the most common reason being that you have not been the owner of the property for two years.
It is generally accepted that a property with in excess of one hundred years remaining is worth approximately the equivalent as a freehold. Where an further 90 years added to any lease with more than 35 years remaining, the property will be equivalent in value to a freehold for many years ahead.
| Lender | Requirement |
|---|---|
| Bank of Scotland | Minimum 70 years from the date of the mortgage. |
| Barclays plc | Leases with less than 70 years at the commencement of the mortgage are not acceptable. Leases with fewer than 70 years should only be referred to the issuing office where the following scenario applies, as discretion may be applied subject to bank approval: • Property is located in any of the following prestigious developments: Cadogan, Crown, Grosvenor, Howard de Walden, Portman or Wellcome Trust Estates in Central London AND • The value of the property subject to the short remaining term is £500,000 or more AND • The loan to value does not exceed 90% for purchases, 90% like for like re-mortgages, 80% for re-mortgages with any element of capital raising and 80% for existing Barclays mortgage borrowers applying for additional borrowing; |
| Birmingham Midshires | Minimum 70 years from the date of the mortgage. |
| Skipton Building Society | 85 years from the date of completion of the mortgage For Buy to Let cases: - lettings must not breach any of the lessee’s covenants; and - consent of the lessor to lettings must be obtained if necessary |
| Yorkshire Building Society | 85 years from the date of completion of the mortgage. Please ensure that you explain the implications of a short term lease to the borrower. |
Using our service gives you increased control over the value of your Deal leasehold, as your property will be more valuable and marketable in terms of lease length should you decide to sell. The conveyancers that we work with have a in-depth market knowledge handling many hundreds of lease extensions or freehold purchase transactions.
Half a year ago Alfie, started to get near to the eighty-year mark with the lease on his garden flat in Deal. In buying his flat two decades ago, the unexpired term was of no relevance. Luckily, he recognised he would imminently be paying an escalated premium for Extending the lease. Alfie arranged for a lease extension just under the wire last April. Alfie and the freeholder eventually settled on an amount of £5,500 . If the lease had dipped below eighty years, the price would have escalated by a minimum £1,025.
Last year we were approach by Mr Lucas Rogers , who bought a one bedroom apartment in Deal in August 2004. We are asked if we could approximate the price would likely be to prolong the lease by a further 90 years. Identical flats in Deal with an extended lease were in the region of £200,000. The average amount of ground rent was £50 collected quarterly. The lease ran out on 14 September 2104. Considering the 78 years left we approximated the compensation to the freeholder for the lease extension to be between £8,600 and £9,800 plus fees.
In 2012 we were phoned by Mr T Wilson who, having moved into a first floor flat in Deal in March 2002. The dilemma was if we could approximate the premium would likely be for a ninety year extension to my lease. Identical homes in Deal with a long lease were valued about £267,600. The average amount of ground rent was £65 invoiced monthly. The lease elapsed in 2093. Having 67 years left we estimated the premium to the freeholder to extend the lease to be between £14,300 and £16,400 not including fees.